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Ladbrokes and Coral merger approved

Geoff Riley

27th July 2016

I once had two students in my class who were both called William Hill. I thought, what's the odds on that?

The Competition and Markets Authority (CMA) has approved the Ladbrokes and Coral merger has been but the bookies must sell 400 shops as part of the conditions attached. This is reported here in the Independent Online and the article suggests that a number of competitors are interested in buying up some of the retail betting outlets as part of their own growth strategy.

Ladbrokes operates around 2,150 betting shops in Great Britain and 77 in Northern Ireland and Coral operates around 1,850 bettting shops in Great Britain. The newly merged firm is likely to overtake William Hill as Britain's biggest bookmaker and the CMA pointed to a substantial lessening of competition in a over 640 local areas as the key reason for insisting on the divestment of stores as part of the merger clearance. This is a good contextual example of microeconomic competition policy in action.

The licensed betting office market is an oligopoly. According to the CMA research, the four largest national LBO operators in the UK are William Hill, Ladbrokes, Coral and Betfred, which together have a share of supply in the UK of approximately 87% by number of LBOs.

In recent years, a growing percentage of bets made in the UK has migrated online.

If you want to investigate further you can access the CMA report summary here.

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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